I had a strange dream tonight. I was walking down the street and found 100 euros. Since I couldn't think of anything to buy, I thought it would be a good idea to invest the money in shares. In my dream, I was very focused on AI-related tech stocks. In the end, there were two companies to choose from:
Vnidia
A huge company that has made a breathtaking rally lately. In my dream, the technology that generates this company's revenue was called Neu-Vanman. It was at the end of its development and the potential development steps in the future were limited. The company had a valuation of EUR 953 billion. I thought to myself that if it becomes the largest company in the world it can surely reach 5000 billion, or 5 trillion EUR.
Chainbrip
A small company that is currently in a downward spiral. The technology of this company seemed breathtaking to me. In my dream, I actually assumed that this company was developing chips that resembled the function of the brain. The first versions were already on the market, and more were soon to be released. The potential seemed huge, both in terms of the market and the possibilities for further development of the technology. The company had a valuation of EUR 374 million. I thought to myself, if it can reach 1% of the size of Vnidia (if it is the biggest company in the world) that would be a huge success à 50000 million EUR, so 50 billion EUR.
I pulled out my slide rule and realised that for every EUR I invested, I was using the following factors:
View attachment 38882
This led to several questions and conclusions if my vague theories in my confused dream were true:
1.) 100 EUR invested in Vnidia = 520 EUR
2.) 100 EUR invested in Chainbrip = 13370 EUR
3) If I want to have equal total returns, I would have to invest only 0.039 cents in Chainbrip for each EUR invested in Vnidia (5.2 / 133.7)
4) Risk assessment: I only wanted to invest in one company, so I asked myself the following question: What are the probabilities? How likely is it that the above-mentioned market caps will be reached? I speculated in my dream, completely from my gut: For Vnidia the probability is 50%, for Chainbrip 10%. That gives a ratio of 5:1 - per Vnidia.
5) Decision: The risk is 5:1 in favour of Vnidia, the potential returns 25:1 (133.7 / 5.2) in favour of Chainbrip. Thus, even if you call me crazy, I was willing to invest the 100 EUR in Chainbrip.
6) If the downward spiral of Chainbrip would continue, the above calculation and decision for Chainbrip would improve exponentially.
I didn't want to wait and see if the share price would drop further, I was too nervous. So I invested the 100 EUR. Then, unfortunately, I woke up. I hope I will continue to dream the dream in 2-3 years, I would be interested to see how everything has developed.
PS: The share price in Germany has slipped back to 0.21 EUR since its all-time high (approx. 1.67 EUR). This means that I have already experienced 87.5% of the pain. So we are on the home stretch
![Winking face :wink: 😉](https://cdn.jsdelivr.net/joypixels/assets/6.6/png/unicode/64/1f609.png)
With the remaining 12.5%, I have a pain ratio of 7:1, which is bearable.